Investor and Analyst Presentation

Delivering, Growing, Innovating

Mortgage Advice Bureau (Holdings) plc

Final Results – year ended 31 December 2018

Disclaimer

The information contained in this document

(“Presentation”) has been prepared by Mortgage

Advice Bureau (Holdings) plc (the “Company”).

This Presentation has not been approved by an

authorised person within the meaning of the Financial

Services and Markets Act 2000.

For the purposes of investors in the United Kingdom,

this Presentation is being made to and directed only

at persons: (i) who fall within Article 19 of the

Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005 (the “FPO”); (ii) who fall within

Article 49(2)(a) to (d) of the FPO; or (iii) to whom this

Presentation may otherwise be lawfully made to or

directed at, all such persons together being referred

to as Relevant Persons. The investments and

investment activity to which this Presentation relates

are available to, and will only be engaged in with,

Relevant Persons. No other person should act or

rely on it.

This Presentation does not purport to contain all

information that a prospective investor may require

and is subject to updating, revision and amendment.

No representation or warranty, express or implied, is

given by the Company or any of its subsidiaries,

advisers, directors,

members, officers, trustees, employees or agent, as

to the accuracy, fairness or completeness of the

information or opinions contained in this Presentation

and, save in respect of fraud or wilful default, no

liability is accepted for any such information or

opinions or for any loss howsoever arising, directly or

indirectly, from any use of this document or its

contents or information expressed in the presentation.

It should be noted that past performance cannot be

relied on as a guide to future performance. This

presentation may contain forward-looking statements

with respect to the Company’s plans and objectives

regarding its financial condition, results of operations

and businesses. All statements other than statements

of historical facts including, without limitation, those

regarding the Company’s financial position, business

strategy, plans and objectives of management for

future operations are forward looking statements. All

forward-looking statements address matters that

involve risks and uncertainties and, accordingly, there

are or will be important factors that could cause the

Company’s actual results to differ materially from

those indicated in these statements. The Company

undertakes no obligation to update any forward-

looking statements contained in this Presentation or

any other forward looking statements

it may make, save in respect of any requirement

under applicable law or regulation. Any forward-

looking statements in this Presentation reflect the

Company’s current views with respect to future

events and are subject to these and other risks,

uncertainties and assumptions relating to the

Company’s operations, results of operations and

growth strategy. No statement in this presentation is

intended to be a profit forecast or be relied upon as a

guide to future performance. Past performance

cannot be relied upon as a guide to future

performance and persons needing advice should

consult an independent financial adviser.

For more detailed information, the entire text of the

final results announcement for the year ended 31

December 2018, can be found on the Investor

Relations section of the Company’s website

www.mortgageadvicebureau.com/investor-relations

2

Agenda

Table of Contents

• Presentation Team

• Key Financial Highlights 2018

• Key Operational Achievements 2018

• How we performed – KPIs

• Revenue

• Dividends

• MAB and Industry Trends

• Market Share Opportunities

• Technology update

• Growing our Addressable Market

• Outlook

• Appendices

3

Presentation Team

Peter BrodnickiChief Executive Officer

• Co-founded the business in 2000

• >30 years’ Mortgage and Financial Services

experience

• British Mortgage Awards: Business Leader

of the Year (3 consecutive years)

Ben ThompsonManaging Director

• >30 years in Mortgages & Financial

Services

• Most recently CEO of ULS Technology

• British Mortgage Awards: Business Leader

of The Year, Press Spokesperson &

Technology Advocate.

Lucy TilleyFinance Director

• Joined MAB Board in May 2015 as

Finance Director

• Former corporate financier; extensive experience

working with listed companies (particularly in

Financial Services, inc. lead roles in IPOs of MAB,

Secure Trust Bank and River and Mercantile)

• Chartered Accountant, qualified at

KPMG in 1996

4

Key Financial Highlights 2018

Revenue

£123.3m | +13%

Gross Profit

£28.4m | +10%

Profit Before Tax

£15.7m | +8%

EPS

25.9p | +9%

Total Proposed

Dividends

23.3p | +9%

Cash Conversion1

113%

Although housing transactions fell during 2018, MAB increased its share of new mortgage

lending from 4.3% to 4.7% of the overall UK market.

1. Adjusted cash conversion is cash generated from operating activities adjusted for movements in non-trading items including loans to Appointed Representative firms ("ARs") and loans to associates totalling £2.2m in 2018 (2017:

£0.7m) and increases in restricted cash balances of £2.3m in 2018 (2017: £1.5m) as a percentage of operating profit. 5

Key Operational Achievements 2018

Market

• Mortgages arranged1

+18%

• Market share increase2

of 10% to 4.7% (against

backdrop of UK property

transactions being down

2.5%)

• Revenue per Adviser

increase of 1% despite

macro headwinds

People

• Ben Thompson joins

as Managing Director

• Dan Maunder joins

as Chief Technology

Officer

• Average adviser

numbers +12%

• Delivered 15% CAGR

in advisers over last 3

years

Technology

• First development phase

now commencing testing

with a number of our

business partners

• Strengthening our unique

business model

• Developments will

directly benefit MAB, its

ARs, their advisers and

customers

1. Gross mortgage lending (inc. Product Transfers)

2. Of new mortgage lending 6

How we performed – KPIs

1,213 advisers

at 31 December

23.1% Gross profit

margin

10.7% overheads

of revenue

12.7% Profit before

tax margin

790 950 1078 1213

2015 2016 2017 2018

11.6% 11.1% 10.9% 10.7%

2015 2016 2017 2018

Average adviser numbers up

12% to 1,130 (2017: 1,008)

Further growth continues:

1,234 advisers at

15 March 2019.

Some costs (eg. Compliance

personnel) closely correlated to

growth. Majority of remainder of

costs typically rise at a slower

rate than revenue. We expect a

modest increase in our IT costs

as part of our fintech

development.

Mortgage mix affects gross

profit margin. Existing ARs

receive slightly better terms as

their revenue grows. New

larger ARs typically join on

lower than average margins.

Subject to the growth in our IT

costs, we would expect the

scalable nature of our cost base

to in part counter the expected

erosion on gross margin as the

business continues to grow.

13.8% 13.5% 13.4% 12.7%

2015 2016 2017 2018

24.2% 23.9% 23.8% 23.1%

2015 2016 2017 2018

7

Revenue

Income source 2018 2017 Increase

£m £m

Mortgage procuration

fees

56.2 46.8 20%

Protection and General

Insurance Commission

47.0 42.9 10%

Client Fees 18.3 17.5 5%

Other Income 1.8 1.7 7%

Total 123.3 108.8 13%

• Revenue increase of 13% generated from:

• +12% average Advisers

• +1% increase in revenue per Adviser

• Gross mortgage completions up 18%

• Increased product transfer opportunities and a reduction in proportion of higher margin residential purchase business, due to slower

purchase market, have led to a lower proportion of insurance commission and client fees

• Protection and GI dependent on mortgage mix

• Client fees reflect mortgage mix, average client fee when charged flat

1%

15%

38%

46%

2018

Mortgage

Procuration Fees

Insurance Commissions

Client Fees

Other Income2%

16%

39%

43%

2017

Mortgage

Procuration Fees

Insurance Commissions

Client Fees

Other Income

8

Strong cash conversion supports Dividend Policy

£14.4m Capital

Adequacy1

£13.9m

Unrestricted

Cash

Balances £8.2m£10.8m

£13.2m

£13.9m

2015 2016 2017 2018

FCA 2018FCA 2017FCA 2016FCA 2015

£11.6m Excess

Capital£9.5m Excess

Capital£7.8m Excess

Capital£6.1m Excess

Capital

£2.8m£2.5m£2.1m£1.7m

23.3p

Proposed

Ordinary

Dividends

• MAB is highly cash generative and capital light

• Materially, operating profits = cash

• MAB requires c. 10% of PAT for increased regulatory capital1

and other CapEx

• The 90% H2 18 final dividend reflects our ongoing intentions

to:

- Distribute reserves not required to support growth in the

business; and

- Maintain a strong regulatory capital buffer.

1. Regulatory capital requirement: 2.5% of regulated revenue, excess capital peaks at period end

2018201720162015

10.6p

11.9p

9.5p

10.5p

7.8p4.9p

9.5p

14.4p

18.3p

21.4p

12.7p

23.3p

9

Industry Trends

2018 v 2017

• Property transactions in 2018 by volume were

2.5% lower than in 2017

• UK new mortgage lending in 2018 of £268bn1:

+4% driven primarily by remortgages

• UK Finance statistics indicate product transfer

market of c. £160bn

• Rate of house price inflation has fallen (c.3% 2)

Segmental movements in gross new mortgage

lending1 by value

• First time buyers: +5%

• Home-owner mover: Flat

• Home-owner remortgage: +13%; strong lender

competition

• BTL purchase: -15%; taxation and other changes

for landlords

• BTL remortgage: +12%

1. UK Finance data (does not include product transfers)

2. Land Registry House Price Index

Market OutlookUK Gross New Mortgage Lending

UK Finance projections for gross new mortgage lending (excludes Product

Transfers) :

• 2019: £278bn, +4%

UK Product Transfers

• Latest UK Finance statistics indicate that the product transfer market is

likely to continue to increase from the c. £160bn for 2018

Property Prices and Transactions

• The twelve month outlook for house prices on a national level remains

broadly flat. With the exception of London and the South East, prices are

anticipated to at least hold steady across the other UK regions over this

time horizon.

• In the near term transactions will remain suppressed across almost all

parts of the UK, with some of the near term pessimism linked to the lack

of clarity around the timing of the departure of the UK from the EU.

10

Source: HM Revenue and Customs Note: Data up to 2005 is for England and Wales only, post 2005 includes Scotland and Wales

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

Property Sale Transactions, UK Countries, 000's

Industry Trends

11

Whole Market Intermediary Market

LATER LIFE LENDING

PRODUCT TRANSFERS1

RE-MORTGAGE (INC BTL)

PURCHASE (INC BTL)

CU

RR

EN

TN

EW

/ F

UT

UR

E

Le

nd

ing

£250Bn

£400Bn

C.£150Bn

C.£100Bn

C.£160Bn

EST.£10Bn

CU

RR

EN

T

NEW /

FUTURE

C.75%

C.75%

C.30% – 35%

C.90%

PURCHASE (INC BTL)

RE-MORTGAGE (INC BTL)

PRODUCT TRANSFERS1

LATER LIFE LENDING

Market Share Opportunities

121 Based on latest UK Finance statistics

Technology update

Midas Platform Development

H1 2019 H2 2019 H1 2020

• Phase 1 testing & live pilot with

ARs

• Customer Portal

• Lender Integration

• Full Phase 1 release

• Wider home-moving service /

functionality

• Intelligent customer lead ingestion

& distribution

• Integrated credit reports & scores

• Interactive digital comms &

notification suite

• Full Open Banking functions &

pre-population

• Early customer capture & nurture

• AI/data profiling delivering greater

efficiency & lead generation

• Extended home services

• Cross border ready

13

Where MAB’s upside exists

1. Tenants/Rental

- using technology developments to fully leverage our significant

estate agency and letting distribution

- help tenants to become FTBs

- protect tenants against inability to pay rent

2. Homebuying

- when consumer confidence returns, pent-up demand ought to

be released

3. Product Transfers / Re-mortgages

- as a historically purchase focused model, using technology

developments to ensure optimisation of this additional

market opportunity

- increase share of the relatively new ‘switching market’

4. Later Life Lending (£65bn of outstanding lending in 2017

to £142bn by 2027) - growth in this market will be driven by intermediaries, not providers

- intergenerational linkage with aspiring FTBs (‘Bank of Mum & Dad’)

- interest only mortgages/roll-off

- shortfall in pensions/longer living & working

- older FTBs = later mortgage maturity

Growing our Addressable Market

AGE 20 35 65 80

RENTING/PREPARING

TO BUY

RENTING FOR LIFE

BUYING / REMORTGAGING

PRODUCT TRANSFERS

LATER LIFE

LENDINGEQUITY

RELEASE

MORTGAGES, PROTECTION, GENERAL INSURANCE, OTHER

INTERGENERATIONAL (BANK OF MUM & DAD)

14

Outlook

• Strong pipeline of advisers from new ARs and our non estate agency based ARs

• Protection growth being driven by new process initiatives and extension into the private rental sector

• MAB has broadened its addressable market, and also plans to become more involved in home moving

• Technology advances and customer lead generation remain important strategic drivers for MAB

• We expect to continue our track record of dividend and profit growth

“We are excited about our developments in technology

which will help us to attract more advisers and customers

into MAB, assisting our future growth plans.”

15

Appendix

Company Overview

• Mortgage Advice Bureau (“MAB”) is a leading UK mortgage

intermediary network

• Directly authorised by FCA, MAB operates an Appointed

Representative (AR) network which specialises in providing

mortgage advice to customers as well as advice on protection

and general insurance

• Over 1,200 Advisers, almost all employed or engaged by ARs

• All compliance supervision undertaken by MAB employees

• Broad geographical spread across the UK, with just 8% of the

Group’s revenue derived from the London market

• Developed leading in-house proprietary trading platform called

MIDAS Pro

• Won over 70 awards in last 5 years

17

Board and Senior Management

18

Our Business Model

Customers

Appointed

Representatives

“ARs”

(over 1,200

Advisers)

FCA

Insurers

Other

Services

Lenders

19

Our Business Model

• One of UK’s leading independent networks for mortgage intermediaries, with over

160 ARs and over 1,200 Advisers nationwide

• Operates two models: (i) MAB-branded mortgage franchise and (ii) non-branded

mortgage network

• Strong reputation for business quality, innovation and support

• Very low attrition rates of ARs

• 90% of ARs have contracts for duration of 5 years or more from commencement

20

There is only one MAB

1. Sample: 2,010 UK adults interviewed online by independent market research agency, Opinium Research, 5th-7th May, 2018

Competitive Positioning Top Broker for Brand Awareness1

21

Revenue and Cash Flow

22

AR

Clawback

Fund

InsurersClient

FeesLenders

MIDAS

c.5%

ARs (over 1,200

Advisers)

Advisers

• Highly cash generative

• All income is paid directly to MAB, from which it deducts its

share of income

• Before paying the AR, MAB also retains typically 5% of the

total amount due to the AR to protect the AR and MAB

against potential future clawbacks of protection commission

• This retention is held in MAB’s name and is segregated

through the use of a separate bank account for each AR

• MAB pays the AR weekly

• AR pays its Advisers

• Materially MAB’s profits = cash

Number of

Advisers

Core Financial Model

Advisers

Revenue

Group

Revenue

Group

Revenue

Paid to

ARs

Gross

Profit

Cost of

sales

Gross

Profit

Cost of

Operations

Pre-Tax

Profit

Profits

from

Associates

X =

- - =

- + =

23

Investments

Appointed Representatives: extending platform, building specialisation:

Products related to MAB Core Business offering:

Testing New Markets:

1 Mortgage Focus is a trading name of Eagle and Lion Limited2 The Group has a 49% shareholding in CO2 Commercial Limited, whose 100% subsidiary is Pinnacle Surveyors (England & Wales) Limited3 The Group has an effective holding of 32.5% in Sort Limited via it’s 43.25% shareholding in Sort Group Limited

35% 20% 25%

49%2 33%3 49%

45%MAB Australia

33%1ClearMortgage Solutions

25%

24

Cash Balance Waterfall Unrestricted Balances1

(1) Unrestricted cash balances are for operational purposes; they exclude restricted balances (AR retained commission in case of clawback)

(2) Cash generated from operating activities of £17.7m, less dividends received from associates of £0.4m and movements in restricted balances of £2.3m25

Income Statement

Year ended 31 December 2018

£’000

Year ended 31 December 2017

£’000

Revenue 123,291 108,847

Cost of sales (94,851) (82,945)

Gross Profit 28,440 25,902

Administrative expenses (13,201) (11,909)

Share of profit from associate 361 500

Profit from operations 15,600 14,493

Finance income 82 42

Profit before tax 15,682 14,535

Tax expense (2,492) (2,494)

Profit for the period attributable to equity holders of

parent company13,190 12,041

Other comprehensive income, net of tax - -

Total comprehensive income, net of tax 13,190 12,041

Basic EPS 25.9p 23.8p

Diluted EPS 25.3p 23.2p

26

Revenue and Cash – Additional Information

Revenue BreakdownYear ended 31 December 2018

£’000

Year ended 31 December 2017

£’000

Mortgage related products 74,453 64,289

Insurance and other protection products 47,021 42,854

Other income 1,817 1,704

Total Revenue 123,291 108,847

Cash and Cash EquivalentsAs at 31 December 2018

£’000

As at 31 December 2017

£’000

Unrestricted cash and bank balances 13,878 13,170

Bank balances held in relation to retained commissions 11,711 9,381

Cash and cash equivalents 25,589 22,551

27

Income Statement - EPS

Basic Earnings per ShareYear ended 31 December 2018

£’000

Year ended 31 December 2017

£’000

Profit for the year attributable to equity holders

of the parent company13,190 12,041

Weighted average number of shares in issue 51,022,846 50,697,207

Basic earnings per share (in pence per share) 25.9p 23.8p

Diluted Earnings per ShareYear ended 31 December 2018

£’000

Year ended 31 December 2017

£’000

Profit for the year attributable to equity holders

of the parent company13,190 12,041

Weighted average number of shares in issue 52,201,486 51,948,051

Basic earnings per share (in pence per share) 25.3p 23.2p

28

Balance Sheet

31 December 2018 £’000 31 December 2017 £’000

Assets

Non-current assets

Property, plant and equipment 2,616 2,648

Goodwill 4,114 4,114

Other intangible assets 645 98

Investments 1,573 1,339

Other receivables 2,296 1,276

Deferred tax asset 878 925

Total non-current assets 12,122 10,400

Current assets

Trade and other receivables 4,603 3,150

Cash and cash equivalents 25,589 22,551

Total current assets 30,192 25,701

Total assets 42,314 36,101

Equity and liabilities

Equity attributable to owners of the parent

Share capital 51 51

Share premium 4,094 3,574

Capital redemption reserve 20 20

Share option reserve 1,675 1,450

Retained earnings 14,829 13,071

Total equity 20,669 18,166

Liabilities

Non-current liabilities

Provisions 1,704 1,496

Deferred tax liability 54 51

Total non-current liabilities 1,758 1,547

Current liabilities

Trade and other payables 18,690 14,999

Corporation tax liability 1,197 1,389

Total current liabilities 19,887 16,388

Total liabilities 21,645 17,935

Total equity and liabilities 42,314 36,101

29

Cash Flow Statement

Year ended 31 December 2018

£’000

Year ended 31 December 2017

£’000

Cash flows from operating activities

Profit for the year before tax 15,682 14,535

Adjustments for:

Depreciation of property, plant and equipment 207 201

Amortisation of intangibles 44 14

Share based payments 477 333

Share of profit of associates (494) (500)

Dividends received from associates 392 353

Finance income (82) (42)

16,226 14,894

Changes in working capital

Increase in trade and other receivables1 (2,437) (1,159)

Increase in trade and other payables 3,691 2,594

Increase in provisions 208 277

Cash generated from operating activities 17,688 16,606

Income taxes paid (2,818) (2,151)

Net cash inflow from operating activities 14,870 14,455

Cash flows from investing activities

Purchase of property, plant and equipment (175) (129)

Purchase of intangibles (591) (103)

Acquisitions of associates , including deferred consideration (132) (234)

Net cash outflow from investing activities (898) (466)

Cash flows from financing activities

Interest received 45 31

Issue of shares 520 532

Dividends paid (11,499) (10,712)

Net cash outflow from financing activities (10,934) (10,149)

Increase in cash and cash equivalents 3,038 3,840

Cash and cash equivalents at the beginning of the period 22,551 18,711

Cash and cash equivalents at the end of the period 25,589 22,551

301 Other than accrued interest income

Industry Trends

Source: UK Finance Regulated Mortgage Survey (excludes Product Transfers), Bank of England. UK Finance BTL data has been used to further analyse this data.31

Industry Trends

Source: HM Revenue and Customs

32